An anonymous reader and I have corresponded considerably over the past month or two about the economics of North American professional sports, as compared with English Soccer/Football, especially at the Premiership level. Much of what follows is lifted shamelessly (but with his permission) from his e-mail messages.
- In the U.S., the only way for a city to get a major league team in any sport is to either get the league to expand or to lure a team away from another city. Both are expensive processes fraught with politics.
In England, a city can get a Premiership team by supporting its local lower-division (minor-league) team, increasing its revenues, hoping the team's managers use the revenues to buy the rights to good players, and winning enough games to get promoted to the Premiership. Expansion and moves are almost unheard of--why go through that when you could just build up the lower-division team in the area instead? (Wimbledon did move to Milton Keynes several years ago, but that was an anomaly.)
Furthermore, even if a city could purchase a franchise and move it, there is no guarantee they could keep it. The teams that finish at and near the bottom of the league each season are "relegated" to the next lower division. It'd be sort of like declaring Tampa Bay or Kansas City to be a AAA team if they finished last in a given season, and then promoting the top AAA team to the majors (Imagine what would happen if the Yankees finished last one season!). Or like promoting the best AA teams to AAA and relegating the worst ones to single A.
Needless to say, under the promotion and relegation system, the lower-division teams are always potential competitors; they definitely are not farm clubs for the top level clubs.
- English football teams play in much older stadiums. From Wikipedia, here are lists of the home grounds of the 20 English Premier League (EPL) teams and the 30 Major League Baseball (MLB) teams:
A minority of EPL teams but a majority of MLB teams play in stadiums built since 1990. This difference is almost surely because the threat of moving is so much more credible in the U.S. than in England.
A lot of the English football stadiums are old, but a lot of the stands in the stadiums are new, and it's rare for a stand from before 1970 to still be in use. So renovation of the stadiums is common--it's entirely new stadiums that are uncommon. Since North American baseball teams usually scoff at offers to renovate their old stadiums and demand entirely new stadiums, this observation about stadiums and threats of moving is still true.
- Geographic concentration in the EPL is much greater than that in MLB.
In the EPL, 19 or 20 teams are either in the London, Birmingham, Liverpool-Manchester, or Newcastle areas--the only exception is Portsmouth. The teams are much more dispersed in MLB. However the system of promoting the best football clubs to the next higher division and relegating the worst teams to a lower division means that geographic dispersion can change considerably, as it will next season. Two Birmingham-area teams (Birmingham City and West Bromwich Albion) and one Newcastle-area team (Sunderland) are being relegated from the top division to the next lower division. In their places will be a team in Reading, a team in Sheffield and possibly (depending on how the playoffs go) a team in Leeds. Still more concentrated than in North American leagues, but not quite as drastic as it was this past season.
This difference is almost surely because it is difficult in U.S. major leagues to expand in or move to an area that is already served by a team. It took forever to get baseball in D.C. again because of the objections of the Orioles' owner. New Jersey could probably support a baseball team, but surely won't get one as long as the Yankees, Mets, and Phillies have any political clout. In England, on the other hand, if an area can support an extra-top division team, you're likely to see a lower-division team get supported and ultimately promoted to the top division--and there's not much that other top-division teams in the same area can do about it. So you get a lot more teams close to other teams and clustered in big population centers.
Under the English system of promotion and relegation, New York would almost surely have three, four, or more teams and Boston and Philadelphia would each have two (as they did into the 1950s), and that those teams would be better-supported than the existing single teams in Milwaukee and Kansas City.
Alternatively, if the NHL operated under the English system, would there be a restored Montreal Maroons to compete with the Canadiens?
Note that being in the Premiership League for English football is worth a great deal of money to a club. If they are relegated, they often disperse the star players for cash and try to rebuild. It boggles the mind to think of this arrangement in American baseball. I cannot imagine that a major league team would be willing to risk major loss of funds and status by being relegated to the minors.
- The sharing of revenues in English football seems to lie somewhere between MLB and the NFL. Much of the television revenue is shared between the teams. But the clubs get to keep most of their other revenue sources. The result is that teams that draw huge numbers of fans have much higher revenues than the others. And of course those that win more tend to draw more fans both at home and away.
At the same time, the revenue sharing from television revenues means that even bad teams have a strong incentive to try to remain in the top league and not be relegated to lower divisions or leagues. This incentive makes some of the games between rum-dumbs near the end of the season almost as exciting as games between the top teams.